‘The worst is over’ for Hong Kong’s shops segment, with rents and prices to recover on better consumer sentiment
- Hong Kong’s shop market can expect a V-shaped rebound in transaction volume and prices in the second half, says Bridgeway CEO Lee
- Prime street shop rents have continued to fall since the social unrest in mid-2019, taking the cumulative decline in value to 75 per cent from 2013
Hong Kong’s shop market is likely to see a V-shaped rebound this year as the easing of social distancing measures following the fifth wave of coronavirus outbreak in the city puts consumer spending back on track.
Shop rents could increase by up to 10 per cent in residential areas and by as much as 20 per cent in core areas, said Edwin Lee, founder and CEO of Bridgeway Prime Shop Fund Management.
“The worst for the shop market is over,” said Lee. “I expect that as the pandemic subsides, and with [subsequent] border reopening at home, there will be a V-shaped rebound in the sales volume and transaction prices [of shops] in the second half of the year.”
The prices of shops will increase by 5 to 10 per cent in residential areas and by 10 to 15 per cent in prime areas, he forecasts.
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Prime street shop rents weakened 5 per cent in the first quarter this year, adding to a three-year slump. They tumbled by one-third in 2019 in the wake of the social unrest, followed by another 23.4 per cent in 2020 and 4.3 per cent in 2021 amid the Covid-19 pandemic, according to Savills.